Big Changes Coming to WA State Taxes – Starting October 1, 2025
- Lily Tran
- Jul 9, 2025
- 1 min read
Washington State has passed a new law (ESSB 5814) that changes how certain services are taxed. Here's what you need to know:
What's Changing?
Sales Tax Will Now Apply to More Services, Including:
IT services, tech support, and training
Building or customizing websites
Security and investigation services (including armored car services)
Temporary staffing (like temp agencies)
Advertising services
Live performances or presentations
Custom software and modifications to prewritten software
Also Important:
Some digital product sales between related companies will now be tax-free.
However, some services that used to be tax-free will now be taxed, like:
Live presentations
Advertising
Data processing services
One new exception: Telehealth services will stay tax-free.
Tobacco Product Tax Update: Starting January 1, 2026, nicotine products (like pouches or synthetic nicotine) will be taxed like other tobacco products.
Note for Service-Based Businesses: Even if you meet clients virtually (e.g., Zoom or Microsoft Teams) or offer digital products/software online, you may now need to charge sales tax.
FAQ including exemptions:
https://dor.wa.gov/taxes-rates/retail-sales-tax/services-newly-subject-retail-sales-tax/frequently-asked-questions-about-essb-5814?utm_campaign=Advocacy&utm_medium=email&_hsenc=p2ANqtz--v3CGHZIfG2oZG-XNN3hzmgDEdJe0uaFGJP-HqYYsR65KmhtyuWAEu1kSoUvlz1P1_Orn5a-oVEB1a3_M8zl2F0GYGNFebmka7h_D_VyIQ_sMzyI4&_hsmi=372478596&utm_content=372478596&utm_source=hs_email
Do we start charging sales tax based on the date the program will be presented, or when it is sold? For example, if a program will be presented in November, but it will be paid for in August, do we need to charge sales tax?